Introduction to Economics

-Consumer: Those who buy or use goods and services

-Good: An item that is produced, sold, and bought by consumers

-Producer: A company or individual who provides goods and services

-Resources: Supplies of value for production

-Scarce: In limited quantity compared to demand

-Service: An action completed for consumers

Economics

Economics is the study of producing and consuming goods and services.

Studying Goods and Services

-Goods are physical items that are produced and sold

-Services are tasks completed by a company for payment

Studying Producer and Consumers

Economics is also about studying producers and consumers and how they work together.

Scarcity and Economics

Economics studies how we make use of scarce resources.

-Scarcity can affect us both individually and societally. It can impact the individuals, businesses, industries, and governments.

Studying Choices

Scarcity forces us to make choices about what to produce and consume.

The Consequences of Choices

Every economic choice has a consequence.

-Choices can create benefits

-For every choice made, an opportunity must be given up

Markets and Choices

Governments regulate the economic choices that producers and consumers can make.

Governments can:

-Allow complete freedom to make economic choices

-Create regulations for producers and consumers

-Strictly regulate the economy

Economics and You

Economics plays a part in everyday life in countless ways.

You economic choices influence:

-How you divide your time between school, work, and leisure

-How you choose to spend, save, or invest

Your Daily Decisions

Your daily decisions are based on your resources.

Income

Pay: $1,500 per month

Expenses

-Rent: $600 per month

-Phone and internet: $100 per month

-Utilities: $80 per month

-Groceries: $250 per month

-Bus pass: $70 per month

Economics and Your Future

Economics is important in planning your future.

-What choices will you make to achieve your goals?

-How will you balance work and leisure?

-How will you spend and save the money you earn?

Working as an Economist

An economist is an expert in economics.

A college-level degree in economics qualifies a person to work in:

-Colleges and universities

-Many corporations and law firms

-Local, state, and national government agencies

Resources and Scarcity

-Allocate: To distribute something among those who need or want it

-Nonrenewable resource: A resource that, once used, is no longer available

-Renewable resource: A resource that can be replenish after use

-Scarcity: The idea that all resources are limited and insufficient to meet unlimited wants and needs

-Value: The worth of an item in consideration with goods, services, or money

Resources

Resources are things people use to make goods and services.

-The metal that’s used to make a car

-The computer that is used to create a website

-The work that a carpenter does building a house

Types of Resources

Land

-Things found in nature, such as minerals and water

Labor

-The effort and skills of people

Capital

-Machinery and equipment used to make products

Renewable Resources

Some resources are renewable, meaning they cannot be replaced after use

Examples include:

-Crude oil, or petroleum

-Coal

-Natural gas

-Many other minerals taken from the ground

Categorizing

Categorizing involves two steps

-Looking for shared qualities that objects have in common

-Grouping objects together based upon their common qualities

Terms:

-Water

-Iron

-Gold

-Lumber

-Solar energy

The Move toward Renewable Energy

The US has been moving from nonrenewable to renewable resources

-Renewable energy use is increasing

-Renewable energy makes up about 9% of energy used

Scarcity

Scarcity is the idea that all resources are limited.

-Resources cannot fulfill unlimited wants and needs

-Scarcity explains why a resource has value and people are willing to pay for it

-Economies must decide how to allocate resources

The Concept of Scarcity

Scarcity:

-Unlimited wants

-Limited resources

Scarcity and Value

Scarcity affects the value of a resource.

-The more scarce a resource, the more consumers are willing to pay for it

-The less scarce the resource, the less consumers are willing to pay for it

Scarcity and Resource Decisions

Resources that are scarce are:

-Costly

-Often used only where they are required

Resources that are less scarce are:

-Less costly

-Often used to make lower-priced goods